TOKYO, May 2 (Reuters) The Nikkei average rose 1.40 percent on Tuesday as shares of Canon Inc. hit a lifetime high after a brokerage lifted its earnings forecasts for the firm, while Honda Motor Co. Ltd. extended recent gains on its earnings results.
After concerns about higher U.S. interest rates triggered a decline in U.S. stocks, investors were homing in on firms seen as some of Japan's best earners, said Hideyuki Suzuki, investment information manager at SBI Securities.
''Investors sometimes go after these leading firms when there are concerns about higher interest rates. In a sense, these are stocks with staying power.... On top of that, their earnings have been good,'' Suzuki said.
''After reporting earnings, Canon seems to be one of the firms that is benefiting from strong results,'' he said.
The Nikkei was up 237.74 points at 17,163.45 as of 0113 GMT.
The TOPIX was up 1.23 percent at 1,738.25.
Canon rose 3.4 percent to 8,940 yen after earlier hitting a lifetime high of 9,020 yen.
Brokerage Goldman Sachs on Monday raised its midterm earnings forecasts for the maker of cameras and copiers, citing stronger sales growth in key areas.
Honda rose 3.7 percent to 8,420 yen. Shares in the auto maker have advanced more than 8 percent since last week, when the firm reported it had more than doubled its quarterly profit and announced a stock split.
Shares of Bridgestone Corp. gained 5.1 percent to 2,895 yen after Japan's top tyre maker raised its operating profit forecast for the six months to the end of June, citing a weaker yen.
REUTERS DKS RK0705